Is There or Should There be a Prima Facie Tort in New Zealand?* by H. Dawson • Joint winner of the Law Review Prize for 1974. I. INTRODUCTION It is the object of this article to show that Allen v.FlootP is the centre-piece of economic tort theory in the common law world and that as such it has restricted the development of any.coherent and consistent prima facie 'tort doctrine.2 Economic torts developed originally from various actions on the case' 'and so· evolved gradually into the separate and nominate torts of passing off, injurious falsehood~ inducing breach of contract, conspiracy 'and, most recently, intimidation. In Allen v. Flood, in 1898, there arose an opportunity to draw together the various nominate torts under one common denominator. However, the: House of Lords, by a majority, concentrated on an "unlawful means" requirement and rejected the contention that motive was at all relevant.3 In doing so, they limited any development of an all­ embracing .tort of "intentionally and unjustifiably causing loss"'. 1 [1898] A.C. 1. IE. R. D. Harrison points to A lien v. Flood as a case which "stands squarely in the way of any individual liability based on malice": Trade Unions and the. common law in New Zealand, (1973), Ph.D. thesis, University of Auck­ land, 528. 's In a casenote in [1964] C.L.J. 225, 226' it is stated: "The law could (and should) have said that there must be 'fair play', but it has chosen instead the formalistic principle that intentional damage need be repaired only if it is inflicted by impermissible means, that is, by methods reprobated by the law of crime, tort and contract." 2 Auckland University Law Review Subsequent developments in this area, however, as, for example. the cases of Quinn v. Leathem' and Rookes v. Barnartl' have either strained or ignored this requirement of "unlawful means". In Stratford (I. T.) & Son Ltd. v. Lindley,6 Viscount Radcliffe stated quite categorically that in his opinion the state of the law in this area, and its insistence upon "unlawful means" as a necessity before an action may be founded, was most unsatisfactory. He suggested that it is the substance of the defendant's action which should be had regard to, and not some accidental or incidental "unlawful means" which may have little to do with regulating trade affairs.7 Towards the end of his speech he said: 8 4, [1901] A.C. 495. All their Lordships distinguished Allen v. Flood on the facts and so evaded the necessity of finding·the requirement of "unlawful means". They held that a combination of two or more to injure a plaintiff, without justification or excuse, resulting in damage to him, is actionable. Having discussed A lien v. Flood, a case in which he himself had sat in the House of Lords, Lord Shand said at 515: "It is only necessary to add that the defendants here have no such defence as legitimate trade competition. Their acts were wrongful and malicious in the sense found by the jury­ that is to say, they acted by conspiracy, not for any purpose of advancing their own interests as workmen, but for the sole purpose of injuring the plaintiff in his trade. I am of opinion that the law prohibits such acts as unjustifiable and illegal; that by so actin~ the defendants were guilty of a clear violation of the rights of the plaintiff, with the result of causing serious injury to him, and that the case of Allen v. Flood, as a case of legitimate competition in the labour market, is essentially different, and gives no ground for the. defendant's argument." Sed quaere? 5 [1964J A.C. 1129. It is clear that Rookes v. Barnard is not founded on "unlawful means" at all if the case is analvsed from a contractual stand­ point. A's threat to break his contract with~ B is no more than an oral or written renunciation of his contractual rights~ it is an unaccepted repudiation having no effect at all. According to Asauith L. J. in Howard v. Pickford Co. [19511 IK.B. 417 at 421 an unaccepted repudiation is "a thing writ in water." There is therefore nothing "unlawful" if A merely states his intention not· to perform his contract. According to well-established contractual principles this is the situation found in cases of anticipatory breach and, until this is accepted by B (and in cases of intimidation B usually does not accept the repudiation), there is never any breach at all. It is clear from Rookes v. Barnard that, as J. D. Heydon points out in Economic Torts (1973), 52, "the House of Lords made it plain that what they really objected to was not the use of illegal means, but certain forms of intentionally caused economic loss. They could not give full effect to this because their hands were tied by the decision in Allen v. Flood that loss caused by means otherwise lawful was not actionable. So intimidation had to remain a tort parasitic upon some illegality judged by rules of law whose purpose might be Quite different from that of regulating trade affairs.'~ In order to be consistent with the principle laid down in Allen v. Flood the House of Lords had to make the threat to break a contract capable of being "unlawful means" for the purpose of this tort, although such a decision has irreconcil­ able difficulties with contractual principles. It is clear, however, that the "unlawful means" is not the gist of the action-it is the intentional and unjustifiable infliction of loss upon the plaintiff which is really being called in question. [1965] A.C. 269. See Heydon, Ope cit., 53. [1965] A.C. 269 at 329-330. Prima Facie Tort in New Zealand 3 What puts the defendants in the wrong in legal analysis is that they have used the procuring of breaches of contract to enforce their policy of attack­ ing Stratford. I cannot say, when I look at the facts of the case, that this strikes me as a satisfactory or even realistic dividing line between what the law forbids and what the law permits. There is a special point here about the existence of a trade dispute, but that is possibly an accidental specialty: one can see that with a small shift in the facts, which the full trial of the action may itself achieve. there could easily be a trade dispute to be con­ templated or furthered. Then there would remain only the hiring contracts: and one sees again how easily a slight difference in the framing of the embargo order might have avoided incitement to breach of contract, while still achieving a virtual cessation of the plaintiff's business. I cannot see it as a satisfactory state of the law that the dividing line between what is lawful and what is unlawful should run just along this contour. The essence of the matter is that the defendants, conceiving themselves to be acting in the in terests of their union, decided to use the power of their control of that union to put the plaintiffs out of business for the time being. When and upon what conditions they would be allowed to resume their business was left in the air. In my opinion, the law should treat a resolution of this sort according to its substance, without the comparatively accidental issue whether breaches of contract are looked for and involved: and by its substance it should be either licensed, controlled or forbidden. The current textbooks list many different economic torts with separate specifications, wholly lacking in principle, and therefore difficult and unprofitable to master.9 The need for an "umbrella" tort, incorporating all nominate torts and certain miscellaneous cases, is also shown by such cases as Bollinger v. Costa Brava Wine Co. Ltd.,lO which one is unable to fit neatly into the ambit of existing nominate torts. Lack of space precludes any detailed examination of the somewhat separately developed torts of passing off and injurious falsehood,l1 therefore this article will concentrate upon the torts of conspiracy, inducing breach of contract and intimidation. It will therefore be necessary to re-examine in the light of subse­ quent developments the case of Allen v. Flood,12 the basis of many of the economic torts, in order to find out whether or not a prima facie tort exists. L. H. Hoffmann states the position in his article "Rookes v. Barnard", where he says: 13 This leads to the final point, which is whether it is not yet too late to distinguish Allen v. Flood on its facts and·reassert the nineteenth-century doctrine that, whatever the means employed, all loss deliberately caused '[1964] C.L.I. 225, 226. 10 [1960] Ch. 262. 11 These torts will be covered by the basic formulation of the prima facie tort; the defence of the prima facie tort; the defence of justification would be equally applicable. It would then be clear that the reason that "confusion" is an important element in one limb of the tort of passing off is to show that loss has been suffered. The formulation of a prima facie tort would also include those cases forming the second limb of the tort of passing off, which have always been diffic!1lt to explain, where there is no possibility of "confusion" arising but there is an appropriation of an economic advant.. age (e.g., Harrods Ltd. v. R. Harrod Ltd. (1923) 40 T.L.R. 195). 12 [189'8] A.C.